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HomeMy WebLinkAboutFS 2010-07-07 Item 2C - Ordinance - Admissions and Entertainment TaxINFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee ISSUE City of Tukwila FROM: Shawn Hunstock, Finance Director DATE: July 1, 2010 SUBJECT: Admission Tax Code Updates BACKGROUND Jim Haggerton, Mayor Several questions have come up by staff and taxpayers over the last several years regarding application of the tax to specific types of businesses, and specific types of revenue received. The Admission Tax provisions found in TMC 3.20 were last reviewed by Council in 2004. The updates contained in the attached ordinance attempt to clarify and clean up the admission tax ordinance and administration of the tax. DISCUSSION The existing ordinance is inconsistent and unclear in its application to specific types of businesses. Currently, the only businesses paying the admission tax are theaters and the Deja Vu- Airport company. The updated ordinance would apply the admission tax to other businesses such as amusement and recreation services, clubs with an admission charge, indoor go -kart tracks, golf, pool and billiard establishments, etc. Application of the new ordinance to specific businesses will be determined on a case -by -case basis, in consultation with the City Attorney. The effect of the new ordinance will be to expand the types of businesses the admission tax is applicable to. RECOMMENDATION The Council is being asked to approve the ordinance providing for changes to the admission tax section of the Tukwila Municipal Code. This item is scheduled to be discussed at the July 7, 2010 Finance and Safety h Committee meeting, the July 12 Committee of the Whole meeting, and the July 19 Regular meeting. ATTACHMENT Admission Tax Ordinance 43 44 DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING ORDINANCE NO. 2080 §1 (PART), AS CODIFIED AT TUKWILA MUNICIPAL CODE CHAPTER 3.20, "ADMISSIONS AND ENTERTAINMENT TAX PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE WHEREAS, the City's admission tax was last reviewed in 2004, and WHEREAS, since 2004, administration of the admission tax has highlighted several areas for clarification; and WHEREAS, the City desires to collect the admission tax as inclusively as possible; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. TMC Section 3.20.010, Amended. Tukwila Municipal Code Section 3.20.010, "Admission Charge Definitions" is hereby amended to read as follows: A. "Admission charge" means the price required or paid for entering a premise or location and includes but is not limited in meaning to 1 A charge made for season tickets or subscriptions (including, but not limited to, dues paid by a member of a club) 2. A cover charge or a charge made for use of seats or tables reserved or otherwise. and similar accommodations. 3 A charge made for food or refreshments in any place where any free entertainment. recreation or amusement is provided. 4. A charge made for rental or use of eouipment or facilities for purposes of recreation or amusement and, where the rental of the equipment or facilities is necessary to the eniovment of the privilege for which a general admission is charged, the combined charge shall be considered as the admission charge. 5 A charge made for entrance to any theater. dance hall. amphitheater, private club, auditorium. observation tower. stadium, athletic pavilion or field. baseball or athletic park, circus. outdoor amusement park or any similar Place; and includes equipment to which Persons are admitted for Purposes of recreation such as merry -go- rounds, ferris wheels, roller coasters. go -carts and other rides whether such rides are restricted to tracks or not. 6. A charge made for automobile Parking where the amount of the charge is determined according to the number of passengers in an automobile. 7. A charge made for entrance to any building. enclosure or area in which there is a swimming Pool, skating rink. golf driving range. miniature golf course. short nine, or other golf course, or to gain entrance to such Pool, rink or course itself. or for the use of the facilities thereof. or any rental Paid by the Person paving for such entry for the use of equipment and facilities supplied him and appropriate to the eniovment of the privilege for which the admission is charged, or the aggregate thereof. B "Admission charge" does not include school activities for grades K -12. W Word Processing Ordinances \Tukwila Amending Admissions Tax 06 2210 CLEAN.doc SH:mrh 06/30/2010 Page 1 of 2 45 46 C. "Cabaret" means a room where musical entertainment is permitted in connection with a restaurant business. D "College" or "university" means any accredited public or private college, iunior college or university. or the recognized student body association thereof insofar as the admission charges received by the college. university. or student body association are budgeted, and applied solely for exhibition. performance. study and /or teaching of the performing arts, visual arts. history or science. It specifically excludes any athletic department or division or activities of the college or university or of the recognized student body association thereof. E. "Department" means the Finance Department of the City of Tukwila, or its functional successor. F "Director" means the Tukwila Finance Director or his or her designee. G. "Market price" means the price at which a seller is ready and willing to sell and a buyer is ready and willing to buy. Market price is a price that is acceptable to both buyer and seller and which might be different from the listed price. Section 2. TMC Section 3.20.020, Amended. Tukwila Municipal Code Section 3.20.020, "Admission Tax Levied" is hereby amended to read as follows: A. There is hereby levied a 5% tax on admissions for entertainment purposes in the City of Tukwila. B. The City of Tukwila will forego collection of admissions tax from Footer Colf Course for a period of three yea=s, beginning January 1, 2005. Section 3. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 4. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2010 ATTEST/ AUTHENTICATED• Christy O'Flaherty, CMC, City Clerk Jim Haggerton, Mayor Filed with the City Clerk. APPROVED AS TO FORM BY Passed by the City Council. Published: Effective Date: Shelley M. Kerslake, City Attorney Ordinance Number: W.\ Word Processing Ordinances \Tukwila Amending Admissions Tax 06 2210 CLEAN.doc SH:mrh 06/30/2010 Page 2 of 2